Acetrader-Daily Market Outlook 11-10-2010
The greenback dropped below 82.00 to a fresh 15-year low against the Japanese yen on Friday, as very weak U.S. job reports boosted speculation that the Fed will further ease its monetary policy to stimulate the economy.
The greenback edged higher from 82.15 against the Japanese yen in Asia to 82.57 in Europe, however, renewed selling interest there sent dollar lower and price swiftly pierced through Thursday’s low of 82.11 after the release of very weak U.S. jobs report. The greenback eventually dropped to a fresh 15-year low of 81.72 in NY morning before recovering.
U.S. jobs report showed US employers cut 95k jobs, much worse than the street forecast of -5k in September whilst private payrolls only showed a gain of 64k jobs vs forecast of 75k..
Although the single currency dropped from 1.3962 in Asia and weakened to 1.3841 in Europe after hawkish comments from St. Louis Fed James Bullard, he said ‘upcoming FOMC meeting in November is going to be a tough call and easing further not obvious case.’ Later, despite euro’s brief but strong rebound to 1.3985 after the release of U.S. jobs report, the pair tumbled sharply to 1.3833 on warning from Jean-Claude Junker, the chairman of eurozone finance ministers, he said that he was not happy with euro reaching .4 level against dollar and euro was too strong today. However, renewed buying quickly lifted the euro price ratcheted higher on dollar’s renewed broad-based weakness and climbed to 1.3958 in NY mid-day .
Although the British pound rose initially to 1.5901 in Asia after Thursday’s strong retreat from an 8-month high of 1.6019, cable then fell below Thursday’s low of 1.5827 to 1.5824 in European morning. However, buying interest lifted the pound to an intra-day high of 1.5966 in NY afternoon due to dollar’s broad-based weakness together with crossing buying in sterling versus euro (eur/gbp sank from 0.8805 to 0.8713).
DJI rose above 11000 for the first time in five months and closed the day at 11006, up by 58 points or 0.53%.
Group of Seven finance ministers and central bankers will gather informally in Washington on Friday ahead of the International Monetary Fund’s twice-yearly meetings this weekend.
Economic data to be released next week include:
No data on Monday (Japan, U.S. and Canada are closed for holiday), Australia NAB business confidence, Japan Consumer confidence, Germany CPI final, HICP final, WPI, U.K. RICS house prices, BRC retail sales, CPI, CPI core, RPI, RPI – X, Trade balance (gbp) on Tuesday, Japan Machine orders, Australia W’pac consumer confi., Swiss Combined PPI, U.K. N’wide Consumer Confi., Avg. earnings 3m , Claimant count, ILO unemployment rate, EU Industrial prod’n, U.S. Import price index , Export price, Canada New housing price index on Wednesday, New Zealand Retail sales, Japan Domestic CGPI, Machine tools orders , U.S. Jobless claims , PPI, PPI core, Canada Exports , Imports , Trade balance (cad) on Thursday, Japan Industrial prod’n , EU HICP final, U.S. CPI, CPI core, Real earnings, Retail sales, Retail sales less auto, U. Michigan survey Prel., Business inventories on Friday.